‘Little Worry’ At Federal Reserve About Another Recession, ‘WSJ’ Says

Midway through a Wall Street Journal story today about whether the Federal Reserve will do something in coming weeks to give the economy a boost is this eye-catching line:

“There is little worry at the Fed of a new recession.”

Despite lousy numbers on job growth, other recent signs that the economy is sputtering and looming problems related to the debt crisis in Europe, “a number of [Fed] officials aren’t yet convinced the outlook has significantly darkened,” the Journal says:

“James Bullard, president of the St. Louis Fed, said the weak May jobs report was disappointing, but not enough to substantially alter his expectation for ‘sluggish growth modestly improving over the coming year.’ Speaking in St. Louis, he also said new Fed policies wouldn’t ease Europe’s financial woes.

“In an interview Friday, Cleveland Fed President Sandra Pianalto said she wasn’t yet convinced that the outlook had significantly darkened.”

We’ll hear more about what Fed economists think is going on when the central bank releases its latest “beige book” review of conditions around the country this afternoon.

At the root of the difference between the way Fed policymakers and most Americans think about what is and isn’t a recession is this:

To economists, a recession is two or more consecutive quarters of declines in a broad array of indicators — employment, production, consumer spending and others. But to most Americans, 3+ years with a jobless rate above 8 percent (which is what we’re experiencing now) sure feels like bad times.

Officially, the economy sank into recession in December 2007 and didn’t get growing again until early summer 2009.